The group has acquired video and film production specialist Jacaranda for £900,000 in cash and £600,000 in shares, while it paid £350,000 in cash for digital agency Public Creative.
“We’ve got three pillars within the business: design agency front-end, manufacturing and deployment. Within the agency front-end we have been working for some time on building an integrated model; we’ve been looking for the skills in film production and pure digital brand activation and these are two more bricks in the wall in terms of capability and skills that we needed to acquire and integrate,” said Communisis chief executive Andy Blundell.
Jacaranda creates and measures the effectiveness of corporate video content for blue-chip brands such as Barclays, Bayer, BP and HSBC.
The award-winning six-staff business has sales of £1.6m generating an EBITDA of £390,000 and the £1.5m purchase price may be boosted by up to £500,000 dependent on the business meeting its gross profit performance targets over the next three years.
Public Creative is an eight-staff, London-based digital agency specialising in web and mobile marketing and has a client roster that includes Innocent, MTV, National Lottery and Vue. In its most recent financial year results it generated an adjusted EBITDA of £50,000 on sales of £600,000.
“There are synergies between our clients and both Jacaranda and Public’s already, so that looks very positive. But this is about building an integrated offering, not just hanging these acquisitions on the Communisis washing line,” said Blundell.
The two separate deals were completed over the weekend, and today (Monday, 28 April) Public Creative relocated to Communisis’ London offices. For the time being, Jacaranda will stay at its current premises, although Blundell said in the future they would look to move all of their agency operations into a new dedicated London facility.
Blundell added that he believed there would be more Communisis M&A activity in the agency space, following the two latest deals and the acquisition of content marketing specialist Editions Publishing in September.
“We look at a lot of companies and we don’t proceed with a lot of those, but all things being equal we intend to grow our front-end agency business further and that implies more acquisitions at some point,” added Blundell.
